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More Foreclosures - More Problems?

As more and more foreclosure listings come on to the market, I see more and more lenders/Realtors write in the listing that the SPDS (Seller's Property Disclosure Statement) and CLUE Report or Claims History will not be provided.
In my opinion, there is no reason for a bank, other than wanting to "play dumb," to say they "can't" provide this information. While it may be obvious that they have never occupied the property, they still have some type (probably very limited) of knowledge about the property.
While I strongly believe that a buyer should always do their own "due diligence," I believe waiving their rights of disclosure in a contract should not be their only option.
Interestingly enough, while the market was heading straight up in the past, many buyers were waiving some of their rights from our contracts as well. Things like inspections, appraisals, warranties etc. were often waived to make an offer more appealing. Think some of these people would like a "do over?"
Fact is, in "good" markets and in "bad," people deserve to be treated fairly and represented well.

For helpful, professional and honest advice, feel free to call Nick Bastian at 602-803-6425 or visit our web site to get to know us better!

Nick Bastian, Tempe AZ Real Estate agent.

Buying or Selling Real Estate?

"Just Call Nick!"

602-803-NICK (6425)

Posted by Nick Bastian - Tempe, AZ Real Estate Agent on 10/06/2007 12:28 AM

Comments (9)

disclosure, foreclosure, spds, nick bastian

9 Comments on More Foreclosures - More Problems?

OCT

2007

I agree...Why do banks get special exemptions. They control the money, so they control the world.. I guess the is life and captialism all rolled into one.

Banks are no longer exempt in Washington State when it comes to the Form 17 (Seller Disclosure Statement). I think this is a good change and adds some accountability!

Lack of property disclosure on Foreclosures comes as no surprise to me. Banks want to exert as little energy as possible as they unload those hot potatoes.

In California, the the Transfer Disclosure Statement is not required on REOs. However the brokers / agents still have a duty to do a reasonably competent and diligent visual inspection.

Thanks for the comments.. Here in AZ, the contract says the seller will provide a Seller Property Disclosure Statement. (SPDS)

I often see verbiage in the MLS sheet that says none available but have seen several situations where the listing agent does not address it in a counter offer. It can get interesting as they are contractually obligated to provide. :-)

That's really up to state law. In Nevada, owners are exempt from providing an SRPD (Sellers Real Property Disclosure Report) if they never lived in the property.

But.... that is because Nevada's SRPD has real teeth if an owner lies when filling it out unlike some other states that I've encountered. Lie about it in Nevada, buyers inspection or not and the seller is in serious trouble.

Considering the penalties in Nevada, if you are an owner that never lived in the property, accurately filling out this four page disclosure is nearly impossible.

I have no clue about Arizona but I can tell you that it is state law that determines the penalties.

Hey Nick! We are seeing that problem pop up in Nevada like Paul explains! It's frustrating and a mortgage broker last night turned me on to an outside AR blog that explains how to light a fire under lenders with these offers. Email me if you are interested in reading it and I will send you the link. I think linking in other people's blog is rude :)

Thanks Renee.. I will send you an email.. Sounds like something I would be interested in reading!

OCT

2007

The California Department of Real Estate recently sent a letter to all licensees advising them to refer any borrower who contacted them regarding a hardship with their mortgage loan to their specific lender for a workout plan. This industry gets filled with vultures under favorable market conditions. Some seek to convince non-suspecting homeowners that they are Trusted Advisors. Well the last time I checked true Trusted Advisors don’t encourage homeowners to accept high risk loans on their primary residence so the can earn a small commission and keep their job while their companies can earn outrageous fees at the expense of the homeowner’s equity. How can there be equity left when it has been stripped away with 3, 4 and sometimes 5 refinances within a 3 to 5 year spam?

When I seriously think about it I not mad, upset but bewildered! There were many homeowners that I consulted and advised that a slight drop in mortgage would not justify the cost and fees, yet they went ahead and did their loan through another originator anyway and no face tough times. I recently heard it said, “The truth would always prevail”. The truth is out now and the proof of the pudding is in the tasting, but this pudding is a little tart.

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